Refer to the information presented in E2-7 for Cambridge manufacturing company.

Information from E2-7

Cambridge Manufacturing Company applies manufacturing overhead on the basis of machine hours. At the beginning of the year, the company estimated its total overhead cost to be $325,000 and machine hours to be 25,000. Actual manufacturing overhead and machine hours were $372,000 and 26,000, respectively.

Required:

1. Prepare the journal entries to record actual and applied manifesting overhead.

2. Prepare the journal entry to transfer the overhead balance to Cost of Goods Sold.